MARKET DEVELOPMENT
China’s Palm Oil Imports Seen Rising to 8-Month High on Demand
China’s Palm Oil Imports Seen Rising to 8-Month High on Demand
14/12/2013 (Bloomberg) - Palm oil imports by China, the second-biggest buyer, may increase to the highest since April this month as consumption gains before a traditional holiday, according to a Bloomberg News survey.
Purchases may be about 550,000 metric tons in December after 500,000 tons in November, the median of five estimates from researchers and traders in China surveyed this week shows.
Rising demand from China may add support to futures traded in Malaysia, a global benchmark, which are up 21 percent from this year’s closing low in July. The Lunar New Year festival starting on Jan. 31 can boost demand for vegetable oil by food processors and packagers, who mix palm oil with other cooking oils, according to the survey.
“Consumption of palm oil has been good going into the year end,” Tian Lei, an analyst at Bric Global Agricultural Consultants Ltd., said by phone from Guangzhou yesterday. “We foresee stable demand next year.”
China’s imports in the year that started on Oct. 1 may be the same level as a year earlier at 6.35 million tons, four of the respondents said, while one forecast a drop. Domestic inventory may increase “slightly” from 900,000 tons now, according to the survey.
Output in Indonesia, the world’s biggest supplier, will slide 1.9 percent to 26.5 million tons this year, dropping for the first time since 1998 after heavy rains and drought, another Bloomberg survey showed.
Global production may exceed demand by the most ever in the year that began Oct. 1 as output surges to a record 58.3 million tons, according to the U.S. Department of Agriculture.
Palm oil for delivery in January on Bursa Malaysia Derivatives yesterday closed 0.7 percent lower at 2,613 ringgit ($807) in Kuala Lumpur. Futures will average 2,800 ringgit a ton next year, Deutsche Bank AG estimates.
Purchases may be about 550,000 metric tons in December after 500,000 tons in November, the median of five estimates from researchers and traders in China surveyed this week shows.
Rising demand from China may add support to futures traded in Malaysia, a global benchmark, which are up 21 percent from this year’s closing low in July. The Lunar New Year festival starting on Jan. 31 can boost demand for vegetable oil by food processors and packagers, who mix palm oil with other cooking oils, according to the survey.
“Consumption of palm oil has been good going into the year end,” Tian Lei, an analyst at Bric Global Agricultural Consultants Ltd., said by phone from Guangzhou yesterday. “We foresee stable demand next year.”
China’s imports in the year that started on Oct. 1 may be the same level as a year earlier at 6.35 million tons, four of the respondents said, while one forecast a drop. Domestic inventory may increase “slightly” from 900,000 tons now, according to the survey.
Output in Indonesia, the world’s biggest supplier, will slide 1.9 percent to 26.5 million tons this year, dropping for the first time since 1998 after heavy rains and drought, another Bloomberg survey showed.
Global production may exceed demand by the most ever in the year that began Oct. 1 as output surges to a record 58.3 million tons, according to the U.S. Department of Agriculture.
Palm oil for delivery in January on Bursa Malaysia Derivatives yesterday closed 0.7 percent lower at 2,613 ringgit ($807) in Kuala Lumpur. Futures will average 2,800 ringgit a ton next year, Deutsche Bank AG estimates.